“When a neutral territory is invaded, its standing army units are immediately placed in it. Use any nationality’s infantry units to represent this neutral force. In each case, appoint one of the players on the opposite side to control the neutral’s units. This player places the neutral units on the board and manages them when they conduct combat. Don’t mix or confuse the neutral units with the units of another power, including the power managing the neutral’s pieces on the board.”
This is needlessly detailed (no offense, Krieg). It’s just saying that defending neutral armies stay neutral. I mean, what does it matter who removes the neutral infantry as they get killed? There are no decisions to make - no casualty choices.
“Capturing an unfriendly neutral gives the capturing player the IPC income of the territory. The invading power places its national control marker on the territory, and its national production level is adjusted upward by the value of the captured territory.”
Note that if you fail to capture it, then obviously you don’t control it, so you don’t get the income.
“If the attack upon the neutral territory is unsuccessful (the territory is not captured), it’s no longer considered neutral and becomes part of the alliance opposing the power that attacked it. For example, if Germany attacked Yugoslavia but failed to capture it, after the attack Yugoslavia would join the Allies. Any remaining defending units stay in the territory, but can’t move. The territory remains uncontrolled, but units from the side it’s now allied with can move into it and take control of it and its remaining units in the same way as if it were a friendly neutral.”
Without specifically saying it, this is saying that you can land aircraft in the territory (it’s friendly to your side now) but that of course does not give you control. Also, if you did get a land unit into it, then the neutral infantry would join the power that took control.
I see I mis-spoke before when I said the country can’t be “activated”, because it can. I’ll clear that up now.